MTN suffers major blow due to Nigeria woes

 ·1 Mar 2024

MTN is expecting a substantial drop in earnings and profits following the significant devaluing of the Nigerian naira.

In a trading statement for the full year ended 31 December 2023 (FY23), the group said that a challenging operating environment severely dampended its resilient underlying operational performance over the year.

The sharp devaluation of the naira against the US dollar impacted MTN Nigeria’s financials, mainly through higher operating and net costs for MTN Nigeria.

The foreign exchange losses in MTN Nigeria’s finances are estimated to be 593 cents (2022: 52 cents) for the period.

The group thus expects its earnings per share (EPS) to decrease between 70% and 90% (-750 cents to -964 cents) to a range of 107 cents to 321 cents for FY 23.

EPS also includes:

  • Impairment losses that mainly relate to Investments, goodwill, property, plant and equipment and remeasurement of non-current assets held for sale totalling approximately -40 cents (2022: -44 cents);

  • An impairment loss on remeasurement of disposal groups of -50 cents (2022: -70 cents);

  • A net gain on the disposal of SA towers of 3 cents (2022: 22 cents) and;

  • The net loss on disposal of property, plant and equipment and intangible assets of -1 cents (2022: 9 cents).

The group also expected a drop in profits, with headline earnings per share (HEPS) dropping between 60% and 80% (-692 cents to -923 cents) to a range of 231 cents to 462 cents.

HEPS was negatively impacted by some non-operational items of approximately -889 cents (2022:
-159 cents) for the year, including

  • Hyperinflation adjustments of -151 cents (2022: 125 cents);

  • Foreign exchange losses of -715 cents (2022: -181 cents), which includes naira depreciation impact of 593 cents (2022: 52 cents);

  • Divestments of nil (2022: -24 cents);

  • Remeasurement of deferred tax asset of nil (2022: -65 cents); and

  • Other non-operational items of -23 cents (2022: -14 cents).
FinancialsFY 23 expected range (R’cents)Expected (decrease) (%)Expected (decrease) (R’cents)
EPS107 – 321(90) to (70)%(964) to (750)
HEPS231 – 462(80) to (60)%(923) to (692)

Despite these issues, the group expects to declare an interim dividend in line with the guidance of a minimum ordinary final dividend of 330 cents per share for FY23.

The group did, however, state that its figures for the comparative FY22 figures, which have been altered following changes to forex requirements in Nigeria, are not included in these estimates.

The group expected to release its results for FY23 on roughly Monday, 25 March 2024.

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